WEBVTT 1 00:00:00.400 --> 00:00:04.320 All right, so markets tumbled for the most part as 2 00:00:04.360 --> 00:00:08.599 trading opened today. We are kind of on a countdown here. 3 00:00:08.720 --> 00:00:12.320 We do not know what is going to happen when 4 00:00:12.320 --> 00:00:14.960 it comes to what President Trump is referring to as 5 00:00:15.160 --> 00:00:21.519 Liberation Day on Wednesday. Investors have continued to unload their 6 00:00:21.519 --> 00:00:25.239 holdings in the stock markets around the world in anticipation 7 00:00:25.600 --> 00:00:29.280 of the tariffs announcement that is coming on Wednesday. Just 8 00:00:29.600 --> 00:00:32.640 within the last few minutes, actually, the Dow Jones Industrial 9 00:00:32.679 --> 00:00:35.920 Average did turn back into positive territory, but S and 10 00:00:35.920 --> 00:00:38.079 P five hundred is down about a half a percent. 11 00:00:38.159 --> 00:00:40.399 The Nasdaq is down about a percent and a half. 12 00:00:40.679 --> 00:00:46.280 We've seen similar percentage losses in markets around the world today. 13 00:00:46.359 --> 00:00:50.079 Because of the power that the American economy has and 14 00:00:50.119 --> 00:00:52.719 the impact that the American economy has on the rest 15 00:00:52.759 --> 00:00:53.280 of the world. 16 00:00:53.479 --> 00:00:57.679 We live in a global economy. The idea that America 17 00:00:57.759 --> 00:01:00.359 is getting screwed over when it comes to tear some 18 00:01:00.479 --> 00:01:03.600 things made here and things not made here is maddening. 19 00:01:03.880 --> 00:01:06.519 And that is Trump's take on all of this. He 20 00:01:06.680 --> 00:01:09.359 believes that the US has long been ripped off by 21 00:01:09.359 --> 00:01:14.000 the European and the Asian powers that be, and if 22 00:01:14.079 --> 00:01:17.599 this is in fact, what he wants, he's going to 23 00:01:17.640 --> 00:01:20.239 be the one probably to pay for it when it 24 00:01:20.280 --> 00:01:23.840 comes to at least short term, long term, you know, 25 00:01:24.239 --> 00:01:27.200 one hundred years down the road. If this all pans out, 26 00:01:27.280 --> 00:01:29.640 and the factories come back to America and they come 27 00:01:29.680 --> 00:01:32.560 back to those communities that elected Trump, the russ Belts, 28 00:01:32.920 --> 00:01:36.400 the Sun Belt, all the Belts, if those factories come back, 29 00:01:36.439 --> 00:01:40.439 things become made in America again. My god, he'll be 30 00:01:40.519 --> 00:01:44.280 lauded as the best president ever. If they don't. If 31 00:01:44.280 --> 00:01:47.200 we struggle, if we are sent into another recession and 32 00:01:47.239 --> 00:01:49.959 we don't pull out of it, it is the worst 33 00:01:49.959 --> 00:01:50.640 president ever. 34 00:01:50.799 --> 00:01:51.000 Yeah. 35 00:01:51.000 --> 00:01:54.280 And he did an interview of the weekend with Kristen 36 00:01:54.359 --> 00:01:56.640 Welker from NBC News, and I think there was another 37 00:01:56.680 --> 00:01:59.840 person that he did two separate interviews, and she asked 38 00:02:00.079 --> 00:02:04.439 him about, Okay, we know and everybody seems to acknowledge 39 00:02:04.599 --> 00:02:08.400 there is a temporary pain that comes with tariffs like 40 00:02:08.479 --> 00:02:11.159 this twenty five percent on cars that come into the 41 00:02:11.280 --> 00:02:16.120 United States and other tariffs as well, and he seems 42 00:02:16.240 --> 00:02:19.080 to say, basically, yeah, we know that this is a 43 00:02:19.120 --> 00:02:22.759 temporary thing, but if we have patients, it's going to 44 00:02:23.840 --> 00:02:26.479 in the end of this it's going to benefit the 45 00:02:26.560 --> 00:02:30.080 United States greatly going forward for the future generations, et cetera. 46 00:02:31.159 --> 00:02:33.400 He's gonna have a hard time selling that because we 47 00:02:34.639 --> 00:02:40.039 humans and we Americans like things to be done immediately. 48 00:02:40.319 --> 00:02:43.280 We want to see the impact right now. You know, 49 00:02:43.319 --> 00:02:46.120 we get impatient when egg prices go up, and then 50 00:02:46.120 --> 00:02:48.520 when they go down, we're thinking, why in the world 51 00:02:48.560 --> 00:02:49.479 didn't they go down fast? 52 00:02:49.479 --> 00:02:53.360 Get It's really not popular politically to do something like 53 00:02:53.439 --> 00:02:56.879 this for that very reason. You know, you don't see 54 00:02:56.919 --> 00:02:59.960 governors and presidents say I'm going to do something now 55 00:03:00.039 --> 00:03:02.639 that's going to hurt us for X amount of years, 56 00:03:02.680 --> 00:03:06.800 for eight, ten, twelve years, so that in fifty years 57 00:03:07.159 --> 00:03:09.439 we are better off, because they don't get credit for that. 58 00:03:09.479 --> 00:03:11.360 It's very unpopular. Now. 59 00:03:11.479 --> 00:03:14.439 Is this somebody who's reached the pinnacle of politics in 60 00:03:14.479 --> 00:03:18.159 America as the president and wants his legacy to be 61 00:03:18.639 --> 00:03:22.280 realized after he's dead, that he brought business back to 62 00:03:22.360 --> 00:03:26.759 America and America back to being the bully in the room, 63 00:03:27.240 --> 00:03:28.800 the good bully in the room when it comes to 64 00:03:28.800 --> 00:03:30.879 you're not going to screw us over and we're going 65 00:03:30.960 --> 00:03:31.599 to make things here. 66 00:03:32.199 --> 00:03:34.199 I don't know, maybe. 67 00:03:34.680 --> 00:03:36.840 This was him on air force one yesterday. 68 00:03:37.199 --> 00:03:38.759 I'll tell you I'll play it when we come back, 69 00:03:38.960 --> 00:03:41.879 because he has some comments, he knows what's coming up. 70 00:03:42.039 --> 00:03:44.520 It's weird that there are very few people in the 71 00:03:44.560 --> 00:03:47.240 White House who know what he's going to do. And 72 00:03:47.280 --> 00:03:49.159 we said this last week when we knew that this 73 00:03:49.280 --> 00:03:52.680 deadline was coming up. He's done these before. He's talked 74 00:03:52.719 --> 00:03:59.719 about wide ranging blanket tariffs across industries or across countries, 75 00:04:00.120 --> 00:04:02.960 and then pulled back once we get closer to the deadline. 76 00:04:02.960 --> 00:04:05.879 There's a possibility that he still does that, but nobody 77 00:04:05.879 --> 00:04:08.280 in the White House seems to know what his plan is. 78 00:04:08.439 --> 00:04:11.319 I'm interested to see how this affects the auto industry 79 00:04:11.400 --> 00:04:13.759 because it's maybe one of the easier things to wrap 80 00:04:13.800 --> 00:04:17.120 your mind around. I have some questions out to people 81 00:04:17.160 --> 00:04:20.319 who work in the industry about what could happen if 82 00:04:20.360 --> 00:04:23.920 these tariffs move forward in terms of cars that are 83 00:04:24.079 --> 00:04:27.800 made in this country but get parts from elsewhere. Trump 84 00:04:27.839 --> 00:04:30.160 did touch on that during the interview as well. 85 00:04:30.279 --> 00:04:32.959 I got an email from a car dealership, and it's 86 00:04:32.959 --> 00:04:35.639 not worth They don't advertise with this, so I'm not 87 00:04:35.680 --> 00:04:38.160 going to say who it was, but I got an 88 00:04:38.160 --> 00:04:42.560 email that basically explained what the plan is for next week. 89 00:04:43.399 --> 00:04:45.920 Here's what we have, Here's what our cars are, Here's 90 00:04:45.920 --> 00:04:48.600 what the inventory looks like. Here's why you should come 91 00:04:48.639 --> 00:04:51.279 shop with us. I mean, it's a bitch to get 92 00:04:51.319 --> 00:04:51.639 you to go. 93 00:04:51.759 --> 00:04:53.920 I guess now the time is my question? 94 00:04:54.120 --> 00:04:56.279 If I'm in the market for a car, do I 95 00:04:56.360 --> 00:04:59.120 buy next week as opposed to six months down the line? 96 00:04:59.120 --> 00:05:01.360 Because you just don't know. I don't know, so give 97 00:05:01.399 --> 00:05:01.839 me a break. 98 00:05:02.199 --> 00:05:06.800 We're talking about the tariffs this week Wednesday, the President 99 00:05:07.000 --> 00:05:09.879 President Trump calling it Liberation Day, the day that the 100 00:05:09.959 --> 00:05:14.279 United States stops getting screwed over by other countries. Reciprocal 101 00:05:14.399 --> 00:05:20.399 tariffs in motion. What will it all mean? Already? The 102 00:05:20.519 --> 00:05:25.879 markets are responding globally. Overnight, you saw this happen in Asia, 103 00:05:26.000 --> 00:05:30.519 and the S and P five hundred sank about point 104 00:05:30.720 --> 00:05:33.680 six percent. I haven't seen an updated number, but sank 105 00:05:33.720 --> 00:05:36.240 about point six percent. On track to finish the first 106 00:05:36.279 --> 00:05:38.279 three months of the year with a loss of nearly 107 00:05:38.399 --> 00:05:42.439 six percent. That would make it this it's for its 108 00:05:42.480 --> 00:05:46.120 worst quarter in nearly three years. The Dow erased an 109 00:05:46.120 --> 00:05:51.480 early loss this morning. Slides for big tech slocks stocks 110 00:05:51.480 --> 00:05:52.040 I don't see. 111 00:05:52.079 --> 00:05:54.920 I can't talk either. Slides for big tech stocks. 112 00:05:54.959 --> 00:05:59.000 That's a stupid phrase anyway, probably because of what happened 113 00:05:59.000 --> 00:06:01.959 over the weekend with Yesla. Nasdaq was down as well, 114 00:06:02.079 --> 00:06:05.279 so it is a global selloff. There are worries that 115 00:06:05.319 --> 00:06:09.199 the tariffs could not be good, that they could worsen inflation, 116 00:06:10.160 --> 00:06:15.360 and it is it is not to be misremembered that 117 00:06:15.720 --> 00:06:19.399 we've gone through this before. Tariffs are as old as 118 00:06:19.439 --> 00:06:22.720 a conversation, as old as our country is in terms 119 00:06:22.800 --> 00:06:24.160 of are they good, are they bad? 120 00:06:24.240 --> 00:06:25.680 When are they good? When are they bad? 121 00:06:26.120 --> 00:06:29.480 You know, you saw tariffs be a problem for the 122 00:06:29.480 --> 00:06:36.079 Great Depression. They precipitated that post World War two. So 123 00:06:36.399 --> 00:06:39.480 and we're coming off the heels of inflation from COVID. 124 00:06:40.319 --> 00:06:42.879 So a lot of people in the know who are 125 00:06:42.920 --> 00:06:47.560 not political at all saying great thought, wonderful thought, bad time. 126 00:06:48.240 --> 00:06:50.120 Two things I'm going to play for you. This is 127 00:06:50.160 --> 00:06:53.000 the sound from last night Air Force one. President Trump 128 00:06:53.079 --> 00:06:56.680 headed back to DC. He sounds a little off, I 129 00:06:56.720 --> 00:06:59.120 mean like he sounds slow. I didn't do anything to 130 00:06:59.240 --> 00:07:01.639 alter this audio, even though it does sound like I did. 131 00:07:01.720 --> 00:07:03.800 I swear, but this is him last night making comments 132 00:07:03.800 --> 00:07:04.120 about the. 133 00:07:04.160 --> 00:07:09.199 TERRORIFFTSY tariffs will be far more generous than those countries 134 00:07:09.240 --> 00:07:14.480 were to us, meaning they will be kinder then those 135 00:07:14.519 --> 00:07:15.360 countries were. 136 00:07:15.279 --> 00:07:18.839 To the United States of America over the decades they 137 00:07:18.920 --> 00:07:21.920 ripped us off like no country's ever been ripped off 138 00:07:21.959 --> 00:07:26.879 in history. And we're gonna be much nicer than they 139 00:07:26.879 --> 00:07:30.040 were to us. But it's substantial money for the country. 140 00:07:30.079 --> 00:07:32.800 Never those It sounded very weird, he did, But you 141 00:07:32.839 --> 00:07:35.399 know what, he's going to be seventy nine in a month. 142 00:07:35.600 --> 00:07:38.199 He is been going at one hundred and twenty five 143 00:07:38.240 --> 00:07:41.360 miles per hour. For the first three months of this year, 144 00:07:41.399 --> 00:07:43.319 he's been going at one hundred and twenty five miles 145 00:07:43.319 --> 00:07:43.639 an hour. 146 00:07:43.959 --> 00:07:48.720 You mentioned specifically the audio industry and how it's facing this. 147 00:07:49.399 --> 00:07:53.800 A CNBC reporter was talking about it specifically and talked 148 00:07:53.920 --> 00:07:59.639 about how carmakers are basically scrambling to try to figure 149 00:07:59.680 --> 00:08:02.680 out how they're going to deal with this going forward. 150 00:08:02.759 --> 00:08:04.759 One of the things that President Trump wants to do 151 00:08:05.240 --> 00:08:08.160 by instituting these tariffs on foreign made cars coming into 152 00:08:08.199 --> 00:08:10.319 the United States, it's to ramp up production here in 153 00:08:10.639 --> 00:08:14.160 the United States. But it's not as easy, as Philibo 154 00:08:14.319 --> 00:08:16.040 will tell you. It's not as easy as just flipping 155 00:08:16.079 --> 00:08:17.399 a switch, which President says, well. 156 00:08:17.279 --> 00:08:20.480 There's some places that only have sixty percent capacity. It's 157 00:08:20.480 --> 00:08:22.519 not as simple as just flipping a switch, right, So 158 00:08:22.600 --> 00:08:25.639 there's tooling. There's also making sure that the plant and 159 00:08:25.800 --> 00:08:29.839 the supply chain can adjust and bring production from a 160 00:08:29.879 --> 00:08:33.919 particular plant overseas back here. But there's no doubt this 161 00:08:34.000 --> 00:08:36.480 is going to be a huge hit for the auto industry. 162 00:08:36.720 --> 00:08:39.559 One executive in the industry texted me earlier and he said, 163 00:08:40.039 --> 00:08:42.399 this is going to drive the auto industry, not the 164 00:08:42.399 --> 00:08:46.039 overall economy, strictly the auto industry into a recession. 165 00:08:47.279 --> 00:08:50.440 There was a comment that the President made to NBC 166 00:08:50.759 --> 00:08:54.240 News is Kristen Welker over the weekend. 167 00:08:54.399 --> 00:08:56.519 That's getting a lot of airplay this morning. 168 00:08:56.720 --> 00:08:59.720 Oh, this is his comment. And by the way, I 169 00:08:59.759 --> 00:09:00.919 don't don't have a recording of this. 170 00:09:01.120 --> 00:09:01.399 I don't. 171 00:09:01.759 --> 00:09:04.919 I think she just basically she recorded the interview and 172 00:09:04.960 --> 00:09:07.919 then talked about it. I haven't found anywhere that the 173 00:09:08.000 --> 00:09:08.960 audio exists. 174 00:09:09.080 --> 00:09:12.080 So he said, I couldn't care less if they raise 175 00:09:12.200 --> 00:09:15.399 prices with regard to the auto industry, because people are 176 00:09:15.440 --> 00:09:18.039 going to start buying American made cars. I couldn't care 177 00:09:18.120 --> 00:09:20.759 less because if the prices on foreign cars go up, 178 00:09:20.799 --> 00:09:27.919 they're going to buy American cars. That is a flipant response, 179 00:09:28.240 --> 00:09:32.120 it but it's also flippant to just roll with that 180 00:09:32.519 --> 00:09:36.399 and not talk about the context of the conversation, right 181 00:09:36.679 --> 00:09:39.159 of you're going to pay more now, you're going to 182 00:09:39.240 --> 00:09:40.200 pay less later. 183 00:09:40.639 --> 00:09:42.960 Well, and then somebody from the White House had to 184 00:09:42.960 --> 00:09:46.360 call NBC News and clarify that he was specifically talking 185 00:09:46.399 --> 00:09:50.879 about foreign cars raising their prices or foreign automakers raising 186 00:09:50.919 --> 00:09:55.120 their prices for cars. Right, Okay, So I referenced this 187 00:09:55.200 --> 00:09:57.080 email that I got from a car dealer that I 188 00:09:57.159 --> 00:10:01.159 have done business with before, and it explains kind of 189 00:10:01.200 --> 00:10:04.440 what their plan is. It said they have a current 190 00:10:04.480 --> 00:10:07.559 inventory of about three thousand new vehicles that would be 191 00:10:07.639 --> 00:10:08.840 unaffected by all of this. 192 00:10:09.000 --> 00:10:10.120 It's terriff free. 193 00:10:10.919 --> 00:10:13.399 And they said, and this is an important thing for 194 00:10:13.480 --> 00:10:15.919 anybody who might be in the market now. The silver 195 00:10:16.039 --> 00:10:20.360 lining is that your trade in is potentially worth significantly more. 196 00:10:21.879 --> 00:10:24.639 So this is kind of a Again, it doesn't matter 197 00:10:24.639 --> 00:10:26.480 which dealer it is, because I'm sure they've all got 198 00:10:27.159 --> 00:10:30.320 similar plans to reach out to customers and say, hey, 199 00:10:30.360 --> 00:10:33.519 this is what we're looking at, but that they also 200 00:10:33.679 --> 00:10:36.559 don't know since the twenty five percent tariff applies to 201 00:10:36.639 --> 00:10:42.279 parts and components. Every vehicle will be affected, even those 202 00:10:42.320 --> 00:10:46.279 built in America, because as every vehicle has parts and 203 00:10:46.320 --> 00:10:49.759 components that are imported, and again some of that stuff 204 00:10:50.000 --> 00:10:54.120 has not been specified by the White House in terms 205 00:10:54.159 --> 00:10:57.519 of how is that going to impact American car makers 206 00:10:57.639 --> 00:10:59.240 who bring in foreign parts. 207 00:10:59.360 --> 00:11:02.840 There's a little bit of Jerry Brown talking about trains 208 00:11:03.000 --> 00:11:03.320 in this. 209 00:11:03.639 --> 00:11:04.720 I like trains. 210 00:11:05.320 --> 00:11:10.039 The President's idealized version of a nineteen fifties America where 211 00:11:10.279 --> 00:11:15.519 everyone buys American made cars and buy local, buy American. 212 00:11:15.919 --> 00:11:18.399 I love it, but we're in twenty twenty five and 213 00:11:18.440 --> 00:11:20.159 it's very difficult to do that. 214 00:11:20.399 --> 00:11:24.919 It's again, and that's why we need the specifics. 215 00:11:24.960 --> 00:11:26.279 I don't know how they do it. 216 00:11:26.440 --> 00:11:29.039 You can't just come up twelve oh one Wednesday morning 217 00:11:29.720 --> 00:11:32.120 and then everybody's looking around going, I don't know how 218 00:11:32.200 --> 00:11:33.720 much I'm supposed to charge for this. 219 00:11:34.240 --> 00:11:34.960 I just don't know. 220 00:11:35.440 --> 00:11:38.120 I like trains. I like high speed trains. 221 00:11:38.200 --> 00:11:41.320 Eating two I do too, Jerry. I also like buy American. 222 00:11:41.480 --> 00:11:46.320 But you know what, I think these ships have passed us. Unfortunately. 223 00:11:46.960 --> 00:11:51.200 We'll see, we shall see. Well, this is the week 224 00:11:51.320 --> 00:11:55.399 we have talked about for quite some time. Now, remember 225 00:11:55.639 --> 00:11:58.960 President Trump put the tariffs in place and decided, I'll 226 00:11:59.000 --> 00:12:02.639 give you some time to acclimate to these new changes, 227 00:12:03.039 --> 00:12:05.240 so I'll actually put them in place in April. Well, 228 00:12:05.240 --> 00:12:08.440 guess what tomorrow is April. The President has set his 229 00:12:08.519 --> 00:12:11.440 aim in imposing these tariffs is to force companies to 230 00:12:11.519 --> 00:12:14.960 move production back to the United States, and if they 231 00:12:15.000 --> 00:12:17.519 make their goods in America, he says, they won't have 232 00:12:17.559 --> 00:12:18.440 to pay the tariffs. 233 00:12:21.399 --> 00:12:24.360 When you talk specifically about the auto industry, it's not 234 00:12:24.519 --> 00:12:27.240 as cut and dry as saying that car was built 235 00:12:27.279 --> 00:12:30.600 in Germany, this car was built in Detroit. That car 236 00:12:30.679 --> 00:12:32.440 is going to have a twenty five percent tariff, and 237 00:12:32.480 --> 00:12:35.799 this one isn't. It's not that simple, because, as we've 238 00:12:35.840 --> 00:12:38.240 seen over the course of decades, the way that the 239 00:12:38.279 --> 00:12:41.879 auto industry has evolved, a lot of those even American 240 00:12:41.919 --> 00:12:46.759 car makers, get parts and pieces from other countries. So, 241 00:12:47.159 --> 00:12:49.559 according to what the White House has said so far, 242 00:12:50.720 --> 00:12:58.000 imported parts and pieces, cogs and wheels, they will be 243 00:12:58.039 --> 00:13:01.960 subject to that twenty five percent terariff. And then obviously 244 00:13:01.960 --> 00:13:05.360 a car built entirely elsewhere would be subject to the 245 00:13:05.360 --> 00:13:07.200 whole price of it would be subject to that twenty 246 00:13:07.200 --> 00:13:10.759 five percent tariff, but we don't know specifically if the 247 00:13:10.799 --> 00:13:14.559 twenty five percent tariff on a on an O two 248 00:13:14.679 --> 00:13:19.480 sensor in your Ford minivan is going to be subjected, 249 00:13:19.480 --> 00:13:21.600 and how that would impact the rest of the price 250 00:13:21.960 --> 00:13:24.279 of the vehicle that's built for the most part in 251 00:13:24.320 --> 00:13:25.000 the United States. 252 00:13:25.200 --> 00:13:28.080 It's talking to some people in the industry and pointing 253 00:13:28.159 --> 00:13:31.320 out to me that new vehicles still haven't come down 254 00:13:31.440 --> 00:13:34.279 since COVID because remember. 255 00:13:34.039 --> 00:13:36.480 The price of new cars, Yeah, the price of new cars. 256 00:13:36.519 --> 00:13:40.279 So the rates are still high and now this hoping 257 00:13:40.320 --> 00:13:45.039 for some sort of ceiling, but that if you are 258 00:13:45.279 --> 00:13:48.720 in the market to buy a car, it's probably better 259 00:13:49.600 --> 00:13:53.799 now because down the line, someone's going to be paying 260 00:13:53.840 --> 00:13:58.519 the tariffs, whether it's you the customer or the dealership, 261 00:13:59.360 --> 00:14:02.000 and both of those don't translate to you getting a 262 00:14:02.039 --> 00:14:02.639 better deal. 263 00:14:03.039 --> 00:14:04.720 Well, I mentioned that there. 264 00:14:04.840 --> 00:14:07.279 I got an email from a dealership over the weekend 265 00:14:07.440 --> 00:14:10.840 in this context and said, we have plenty of cars, 266 00:14:11.559 --> 00:14:15.279 you know, new cars that on our lots that are 267 00:14:15.320 --> 00:14:19.399 not subject to tariffs because they're already made, and now 268 00:14:19.480 --> 00:14:21.279 might be the time to think about your trade in 269 00:14:21.360 --> 00:14:23.919 because people are going to start looking for used cars 270 00:14:23.960 --> 00:14:26.159 a lot more and those prices of used cars are 271 00:14:26.159 --> 00:14:28.399 going to bounce back up, y say, will for right. 272 00:14:28.799 --> 00:14:33.039 So again it's this weird wait and see kind of 273 00:14:33.080 --> 00:14:40.279 attitude for what exactly happens beginning April. It's midnight April second. 274 00:14:40.519 --> 00:14:42.799 So the very very first thing Wednesday morning. 275 00:14:42.919 --> 00:14:44.840 Well, and the thing is, like some people don't know, 276 00:14:44.960 --> 00:14:48.120 Like Neil today said, oh, we both drive GMCs. Yes 277 00:14:48.240 --> 00:14:51.639 you think you bought American you did, but parts in 278 00:14:51.720 --> 00:14:54.320 those cars are made in other areas. 279 00:14:54.559 --> 00:14:56.039 It's not as easy as saying. 280 00:14:55.840 --> 00:14:58.759 Oh I bought Ford, I bought Chevy, I bought GMC's. 281 00:14:59.360 --> 00:15:01.200 There's a lot of the hearts of those cars that 282 00:15:01.240 --> 00:15:03.559 are made in Mexico or Canada or what have you, 283 00:15:03.679 --> 00:15:05.919 across you know, computer systems. 284 00:15:06.000 --> 00:15:08.679 The two motivations that Trump has said he has behind 285 00:15:08.720 --> 00:15:12.919 this is he wants he wants to lower taxes, and 286 00:15:12.960 --> 00:15:15.559 the way that he would do that, according to Peter Navarro, 287 00:15:15.679 --> 00:15:19.039 senior trade advisor, is that the tariffs would raise about 288 00:15:19.080 --> 00:15:23.159 six trillion over the next decade and that money would 289 00:15:23.159 --> 00:15:25.879 not have to be gathered from taxes, so then they 290 00:15:25.919 --> 00:15:28.240 would be able to cut taxes. The other thing is 291 00:15:28.279 --> 00:15:30.440 that he would want he the president, would want to 292 00:15:30.559 --> 00:15:35.039 drive manufacturing back to the United States where some of 293 00:15:35.080 --> 00:15:38.279 these automakers right now are only running at about a 294 00:15:38.320 --> 00:15:41.399 sixty percent capacity when it comes to cranking out these vehicles, 295 00:15:41.639 --> 00:15:44.840 and that he wants to see them that number increased. 296 00:15:45.120 --> 00:15:47.879 But they've been running at that level for a long time, 297 00:15:48.039 --> 00:15:50.240 and to get it back up to one hundred percent 298 00:15:50.360 --> 00:15:53.480 or whatever percentage he's shooting for, that's going to take many, 299 00:15:53.480 --> 00:15:57.799 many years of retooling the lines, getting everything, hiring the workers, 300 00:15:57.799 --> 00:15:58.559 and that sort of thing. 301 00:15:58.639 --> 00:16:03.120 So well, market Watch and Bloomberg call Ryan Sweet one 302 00:16:03.159 --> 00:16:06.679 of the most accurate forecasters of the US economy. Ryan's 303 00:16:06.679 --> 00:16:08.519 going to be coming on with us next to talk 304 00:16:08.559 --> 00:16:09.960 about what we can expect. 305 00:16:10.360 --> 00:16:12.919 We love to have smarter people than us help explain 306 00:16:13.000 --> 00:16:13.720 some of this stuff. 307 00:16:13.720 --> 00:16:15.360 And Ryan Sweet qualifies. 308 00:16:15.519 --> 00:16:19.440 He's the chief US economist at Oxford Economics, responsible for 309 00:16:19.440 --> 00:16:24.240 forecasting and assessing the economic outlook. He's an adjunct professor 310 00:16:24.279 --> 00:16:27.799 in economics and finance at Westchester University of Pennsylvania. Ryan, 311 00:16:28.399 --> 00:16:30.399 thank you for taking time out of your smart day 312 00:16:30.440 --> 00:16:32.080 to hang out with a couple of people like us. 313 00:16:33.879 --> 00:16:35.480 Oh now, thank you very much for having me. 314 00:16:36.200 --> 00:16:39.679 So it depends, it seems on who you ask on 315 00:16:40.000 --> 00:16:46.559 whether this is going to raise revenue directly if that 316 00:16:46.639 --> 00:16:49.879 contradicts the goal of using tariffs to bring factories back 317 00:16:49.919 --> 00:16:50.480 to the US. 318 00:16:50.600 --> 00:16:53.519 What is your take on this short term and long term? 319 00:16:55.720 --> 00:16:57.120 Well, and the short term is going to call us 320 00:16:57.120 --> 00:16:58.279 some economic pain. 321 00:16:59.159 --> 00:17:03.120 You are inflationary. They are going to raise the price 322 00:17:03.240 --> 00:17:08.519 level for a lot of goods that we import. It 323 00:17:08.599 --> 00:17:11.480 will generate, right venue. I mean, the US Government's going 324 00:17:11.480 --> 00:17:15.960 to collect a boatload of money through these tariffs, and 325 00:17:16.079 --> 00:17:18.440 that might be helped or maybe used to help pay 326 00:17:18.480 --> 00:17:21.279 for some of the fiscal steamulus that's coming down the 327 00:17:21.359 --> 00:17:24.680 road via extension of the Trump tax cuts, maybe some 328 00:17:24.839 --> 00:17:32.160 additional stimulus, or pay for some funding around their bonus 329 00:17:32.160 --> 00:17:35.599 appreciation things like that for businesses. Longer term, you know, 330 00:17:35.640 --> 00:17:37.880 the jury is going to be out on whether or not, 331 00:17:38.160 --> 00:17:41.000 you know, Trump's approach to trade policy is successful, and 332 00:17:41.039 --> 00:17:42.440 it's going to be based on whether or not we 333 00:17:42.519 --> 00:17:45.359 bring back a lot of jobs in manufacturing. And I'm 334 00:17:45.400 --> 00:17:50.680 skeptical in that regards because even with tariffs, comparative advantage. 335 00:17:50.680 --> 00:17:53.000 As an economists, I still believe in comparative advantage, and 336 00:17:53.519 --> 00:17:55.480 you know, the US has a disadvantage when it comes 337 00:17:55.480 --> 00:17:58.319 to wage rates, they're much lower in other parts of 338 00:17:58.359 --> 00:18:02.319 the world. Just the reshoring of a lot of manufacturing 339 00:18:02.359 --> 00:18:05.119 is going to be very, very expensive for a lot 340 00:18:05.119 --> 00:18:08.079 of companies, and the age of the manufacturing capital stock 341 00:18:08.119 --> 00:18:09.400 in the US is pretty old. 342 00:18:10.279 --> 00:18:16.000 Well, if one of the promoted benefits of this tear 343 00:18:16.039 --> 00:18:18.279 off plan the way it's laid out, at least we'll 344 00:18:18.279 --> 00:18:20.920 see if it actually comes to fruition on Wednesday morning. 345 00:18:21.000 --> 00:18:26.039 But if one of the benefits is to re energize 346 00:18:26.160 --> 00:18:29.920 our manufacturing capabilities here, is that too rosy? An outlook 347 00:18:30.039 --> 00:18:32.480 is that are they overshooting what they think is that? 348 00:18:32.839 --> 00:18:34.480 Are they overshooting what will happen? 349 00:18:36.880 --> 00:18:38.319 Well, I think it's all on the messaging, And I 350 00:18:38.359 --> 00:18:41.920 mean the messaging can be different from reality when it 351 00:18:41.960 --> 00:18:43.799 comes from an economic perspective. 352 00:18:43.839 --> 00:18:45.359 I do think there will be reshoring. 353 00:18:46.359 --> 00:18:49.799 For example, semiconductors, chips, they're the poster child for being 354 00:18:49.839 --> 00:18:51.000 able to get reshored. 355 00:18:51.440 --> 00:18:51.599 You know. 356 00:18:51.640 --> 00:18:54.160 I think the Trump administration should kind of level set 357 00:18:54.200 --> 00:18:58.039 and you know, kind of layout. The areas that will 358 00:18:58.039 --> 00:19:01.480 be reshort are more tard. It's not a broad based 359 00:19:01.519 --> 00:19:06.279 reshoring of US manufacturing. So for example, very labor intensive 360 00:19:06.279 --> 00:19:08.839 apparel manufacturing will not come back. 361 00:19:08.720 --> 00:19:09.960 To the US and North Carolina. 362 00:19:10.079 --> 00:19:13.839 South Carolina will not see apparel manufacturing come back, just 363 00:19:13.880 --> 00:19:16.240 because the US doesn't have a comparative advantage in that 364 00:19:16.359 --> 00:19:23.079 US's advantage is in very high capital intensive manufacturer goods, 365 00:19:23.119 --> 00:19:25.799 and that's more likely and not going to be reshort 366 00:19:25.839 --> 00:19:28.119 over time. So there's how some of my list would 367 00:19:28.119 --> 00:19:33.599 be further reshoring of chips, personal protective equipment, pharmaceuticals, biomeds. 368 00:19:33.599 --> 00:19:35.160 Those are the things that will likely. 369 00:19:35.000 --> 00:19:38.279 Get reshored, whereas apparel will probably be at the very 370 00:19:38.319 --> 00:19:40.519 bottom of that list. And I know steel and aluminum 371 00:19:40.519 --> 00:19:43.000 gets a lot of headlines, but the steel capital of 372 00:19:43.039 --> 00:19:46.000 the US used to be Pittsburgh in the nineteen sixties, 373 00:19:46.000 --> 00:19:49.640 seventies and eighties. That economy has completely reinvented itself. It's 374 00:19:49.680 --> 00:19:53.519 now EDGs and meds and tech. And it's not like 375 00:19:53.559 --> 00:19:57.319 you can turn on and off a switch to a 376 00:19:57.319 --> 00:20:00.119 city like Pittsburgh. They can't just flip over to being 377 00:20:00.240 --> 00:20:02.279 back to the steel capital of the US. 378 00:20:02.640 --> 00:20:02.920 Right. 379 00:20:03.079 --> 00:20:04.319 That's a very good point. 380 00:20:05.279 --> 00:20:07.880 We talked about it a little bit earlier, how some 381 00:20:07.960 --> 00:20:11.599 of these ideas sound good by American made things like 382 00:20:11.640 --> 00:20:14.720 that bringing the jobs back to the Rust Belt and 383 00:20:14.759 --> 00:20:16.960 the sun Belt, and you know all the places of 384 00:20:17.160 --> 00:20:20.240 disenfranchised voters who voted Trump and to hope to bring 385 00:20:20.319 --> 00:20:25.720 back some sort of industry to those various places. Pittsburgh's 386 00:20:25.720 --> 00:20:29.160 one of them that has moved on. So what do 387 00:20:29.200 --> 00:20:31.119 you see, like you bring up a peril that that 388 00:20:31.240 --> 00:20:33.720 would not be something that came back, at least not 389 00:20:33.799 --> 00:20:36.079 at this point. So what kind of impact would that 390 00:20:36.160 --> 00:20:40.240 have on the economy if a peril would not be reshort? 391 00:20:42.519 --> 00:20:43.559 Oh, not a big impact. 392 00:20:43.720 --> 00:20:47.440 I mean in the grand scheme of things, you know, separating, 393 00:20:47.480 --> 00:20:51.839 I think you hit the nail on the head early on. 394 00:20:51.880 --> 00:20:53.680 I mean, the short term impacts are going to be 395 00:20:53.720 --> 00:20:56.720 different than the long term impacts. In the short run, 396 00:20:57.359 --> 00:20:59.079 in the price level for a lot of goods is 397 00:20:59.079 --> 00:21:00.759 going to go up. That's going to do people's real 398 00:21:00.759 --> 00:21:02.759 disposable income. So you and I are going to feel 399 00:21:02.759 --> 00:21:05.799 the pinch, and more likely than not, a lot of 400 00:21:05.839 --> 00:21:10.000 people are going to pause or slow their spending. And 401 00:21:10.319 --> 00:21:13.559